Pantaloon Retail India Ltd has set lofty growth targets for itself, but execution of these targets may be jeopardised by a shortage of manpower, a research report issued by Deutsche Bank AG says.
The July 2006 report says that PRIL's planned expansion to 30 million square feet of retail space by 2010 target would need around 200,000 employees while its current workforce strength is around 13,000.
"While PRIL has signed up the floor space, investments into processes are behind the curve, it seems", says the report.
Valued at 38x on financial year 2007 earnings and 25x FY08E, the stock was not cheap, with execution and inventory write-off risks, added the report.
PRIL was targeting a ten-fold increase in area by 2010. The DB report says the proposed ramp-up in area appeared doable given he mall construction boom in India. In FY07 itself, around 54 mn.sq.ft of new mall space was expected.
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